Reference no: EM132983010

At 1 July 2014, Steven Ltd acquired the following non-current assets:

Machine A                   Machine B                         Machine C

Cost 60,000                    Cost 40,000               Cost 100,000                  

Useful Life 5 years         Useful Life 8 years           Useful Life 5 years

• The firm uses the valuation model for all three assets
• At 30 June 2015, the fair values of all assets were assessed. Machine A had a fair value of $65,000, and Machine B a fair value of $30 000. The remaining useful lives were assessed to be 4 years for Machine A and 4 years for Machine B. At this time the value of Machine C was unchanged.
• At 30 June 2016, Machine C was sold for a consideration of $75,000. On the same date the fair values of Machine A and Machine B were reassessed. Machine A had a fair value of $28,750, and Machine B a fair value of $32,500.

Required:

Problem 1: Prepare the journal entries for Steven Ltd for the years ending 30 June 2015 and 2016. Assume a tax rate of 30%.